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This Week in Health Care Reform - February 24th, 2017

New national health spending projections are released; a lengthy wish list awaits the next federal health IT chief; the Administration discovers that there’s no easy prescription for rising drug prices; and, efforts continue to repeal the harmful health insurance tax.

Week in Review

Health Spending: Last week, actuaries at the Centers for Medicare & Medicaid Services (CMS) released their latest health spending projections.  In it, analysts forecasted that national spending on health care will grow 5.6 percent through 2025.  While those estimates come in slightly below the projections CMS made last July (5.8 percent), as well as the previous two decade average prior to 2008 (8 percent), it’s worth noting that, as the cost of medical care is expected to grow at a faster clip over the next decade, growth in health spending is expected to outpace that of gross domestic product (GDP).  In fact, by 2025, health spending will represent nearly 20 percent of GDP (up from the 17.8 percent measured just two years ago).  However, experts were quick to point out that CMS’ latest projections assume that the current health care framework will be in place over that period – which is to say that new legislation affecting the individual market, Medicare, or Medicaid, would likely lead to significant changes to those projections.
Health IT: Spending in the health IT market is expected to continue its upward trajectory this year.  The federal government alone is set to increase its investment in the space to the tune of $400 million over the next five years, bringing their total spend across all agencies to some $6.4 billion in fiscal 2021.  With new technologies poised to disrupt the health care market in 2017 and beyond, health IT experts have a growing wish list of items for the as-yet-to-be-named head of the Office of the National Coordinator for Health Information Technology at the Department of Health & Human Services (HHS).  Top of the list for the next federal health IT administrator is the need to improve the interoperability of our nation’s multitudinous health systems.  From a practical standpoint, what many will really be looking to the new health IT chief to do is to help health care organizations maximize their billion dollar investments in health information technology.
Rx Prices:
Despite overtures to make prescription drug prices a priority item on its evolving agenda, the new Administration is quickly learning that there’s no easy cure to this growing problem.  Coming out of a meeting with pharmaceutical executives last month, the President outlined a handful of tactics he’d like to see deployed in a comprehensive effort to combat rising drug prices.  However, what became clear in the immediate aftermath of that meeting (and those comments) was that his ability to effect the kind of change stakeholders across the health care spectrum have been clamoring for is decidedly limited.  While public sentiment is overwhelmingly on his side, the political realities of government action putting a much-needed check on out-of-control prescription drug prices makes the likelihood of that happening remote, at least in the near term. 
As lawmakers circle the wagons around repeal of the health care law, a growing group of stakeholders is drawing increased attention to one thing that elected officials can do right away to bring down health care costs – specifically, the repeal of the health insurance tax (HIT).  Described as a “direct sales tax on health insurance”, the HIT continues to find itself the topic of conversation, hardly surprising, opponents argue, given that it increases premiums for small business owners, working-class families, and seniors.  Separately, a large trade organization offered up its support of recent legislation to fully and permanently repeal the HIT.  Representing the nation’s lumber and building materials industry, the National Lumber and Building Material Dealers Association (NLBMDA) released a statement late last month applauding the bipartisan bill co-sponsored by Reps. Kristi Noem (R-South Dakota) and Kyrsten Sinema (D-Arizona) to eliminate the HIT, easing the health care cost burden on their constituency.      

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